The Nation Newspaper

Tag: Lamido Sanusi

  • Alleged contempt: Sanusi, others get June 26 date

    Alleged contempt: Sanusi, others get June 26 date

    A Federal High Court in Abuja has fixed June 26 for

    hearing on an application praying it to open trial in the alleged contempt case against Central Bank Governor, Lamido Sanusi, Managing Director, Nigeria Deposit Insurance Corporation (NDIC) Umar Ibrahim and 13 others.

    Justice A. Abdul-Kafarati chose the date last Thursday after entertaining arguments from parties on the priority of application to be taken.

    Plaintiffs’lawyer, John Okoriko, urged the court to first consider his clients’application, which seeks an order setting dawn the motion for committal for hearing despite the filing of applications for stay of proceedings by the defendants.

    He argued that it was the practice that a court must first preserve its integrity and dignity by dealing with issues relating to the disobedience of its order, before taking any further steps.

    He relied on the Supreme Court decision in the case of Ebhodaghe and Okoye, reported in (2004) 18 NWLR (Pt 905) page 472 SC at pages 494-495.

    In the alternative, he argued that the court could still proceed with the contempt proceedings even when a stay of proceedings is granted in the substantive case, on the ground that the contempt case was independent of the civil case.

    Okoriko also urged the court to hear and grant the plaintiffs’ pending applications seeking the appointment of its Registrar to assume custody of the assets of the first defendant (in the civil suit) with the other defendants.

    On this point, he relied on the Court of Appeal decision in the case of Okafor and Okafor, reported in (2000) 11 NWLR (Pt 677) page 21, particularly at page 32.

    Defence lawyers led by S. S. Ameh (SAN) argued otherwise, insisting that the court must first deal with their applications seeking to stay proceedings and also challenging the court’s jurisdiction to here the case.

    He argued that where many applications are contesting the attention of the court, it must give priority to that challenging its jurisdiction.

    Justice Abdul-Kafarati elected to hear the applications seeking stay of proceedings along with that praying that the contempt proceedings be conducted.

    The contempt charge against Sanusi and others, was initiated by plaintiffs in a N7.013billion suit against Fortune Bank and five others, for allegedly dissipating the bank’s assets despite an order restraing the defendants and their agents from tampering with Fortune Bank’s assets in their custody pending the determination of the main suit.

    Named with Sanusi, Ibrahim and their organisations, in the contempt charge are the Managing Director, First City Monument Bank (FCMB) Ladi Balogun and his bank; his counterpart in Fidelity Bank and Union Bank – Reginald Ihiejiehi, Emeka Enuwa and their banks.

    Others include two agents appointed by the CBN to manage Fortune Bank’s assets – Tobe Iwobi and Abdulwahab Abdulrahman; a lawyer in the firm of Simmons Cooper Partners, Dapo Akinosun, Udochi Iheanacho and Fortune Bank.

    The plaintiffs in the substantive suit are Bedding Holdings Limited, Postal Innovations and Systems Limited and Chief Sylvester Odigie.

    The defendants include Fortune, NDIC, CBN, Attorney-General of the Federation, Fidelity Bank and FCMB.

    The plaintiffs had instituted the suit marked: FHC/ABJ/CS/844/2011 claiming N7,012,944,550 as special and general damages against the defendants arising from the plaintiffs investment in the first defendant (Fortune Bank) from 2005 since CBN and NDIC took it over for allegedly being in liquidation.

    Subsequently, the court gave a mareva order made ex-parte on November 25, 2011 and another interlocutory order made on February 21, 2013 restraining all the defendants from tampering ar taking steps to dissipate Fortune Bank’s assets in their custody pending the determination of the substantive suit..

    The plaintiffs averred, in an affidavit supporting their motion for committal, that despite the subsistence of the mareva injunctions, the defendants have taken steps to deplete Fortune Bank’s assets.

    They cited purported moves to sell Fortune bank’s main property in Lagos – Fortune Towers – to Union Bank and alleged depletion of the bank’s funds in an account with FCMB by the defendants despite the subsistence of the order restraining them from tampering with Fortune Bank’s properties and funds until the determination of the substantive case.

    The plaintiffs were customers to Fortune Bank until the CBN’s banks’ consolidation policy.

    They stated, in a supporting affidavit, that they had a fixed deposit account with a balance of over 230million around 2005, but that the bank allegedly frustrated their efforts to access the funds for several business transactions, in the cause of which they suffered huge loses, business interests and incurred debts running into billions of naira.

    In their response to the suit, the defendants filed notices of objection, challenging its competence and the court’s jurisdiction.

    The court has since dismissed the objections and assumed jurisdiction, a decision the defendants have appealed.

    They have now filed applications for stay of proceedings pending the determination of their appeal.

     

  • Social inequality in the North

    Social inequality in the North

    Mass illiteracy in the region is a drag on national development

    Governor of the Central Bank of Nigeria, Mallam Sanusi Lamido Sanusi, threw a bombshell on April 11 when he addressed the Isaac Moghalu Foundation Leadership Lecture and Symposium in Abuja. Dwelling on Women in Leadership: the Education Pipeline, the CBN governor lamented the status of girls and women in the North, a region that has relentlessly come under fire in recent times, as insurgents have made the zone unattractive for foreign and domestic investors.

    The statistics he reeled out were frightening. He disclosed that more than 90 per cent of women and girls in the North West are unable to complete their secondary school education. He pointed out that, contrasted with figures from the South West where less than 10 per cent of girls stay out of schools, the inequality underlying such indices could be responsible for the restlessness, poverty and consequent insecurity in the North.

    The 51-year-old CBN governor said: “We are only treating the symptoms, not the ailment. We are spending so much on security, compared to education and healthcare services. We cannot succeed in security without fixing the original problems.”

    Questions have been asked about the performance of governments of the northern states in the past 52 years. Culturally, girls and women have been suppressed over the years, thus widening the inequality gap, not only between men and women in the region, but also dragging down the rate of development in the country. A survey by the British Council last year indicated that 80 per cent of women aged between 20 and 29 in eight states of the North were unable to read and write, the corresponding figure for the South was 54 per cent. The British Council’s Gender in Nigeria report further indicated that 94 per cent of women in Jigawa State and 42 per cent of the men in the state were illiterates.

    The document also brought up the shameful fact that two-thirds of girls between 15 and 19 years in the North are unable to read an English sentence, while, in the South, the figure is 10 per cent. Consequently, given the population of women and girls in the North and the poor literacy level in the region, Nigeria has been unable to advance towards the achievement of the Millennium Development Goal on education, especially of the female folk. Nigeria ranks 111th of 134 countries on the Gender Equality Index.

    The rate of poverty, too, is growing very fast. While the national poverty rate in 1980 was put at 28 per cent, it has now almost doubled.

    The goal of education for all by 2015 is now a mirage as the token steps being taken by the federal and Northern states are not yielding results. At a point, the Babangida administration came up with the nomadic education plan to attract children of the Fulani herdsmen to the classrooms. It did not succeed. Currently, the Jonathan government is setting up almajiri model schools. This may go the same way as those hungrier for education could find their way to the schools and take over, thereby defeating the aims for which they were established.

    As Mallam Sanusi pointed out last year in a speech directed at entrepreneurs in the North, the region has remained poor, partly because of cultural practices that limit the education and productive engagement of women. This must be tackled by all in the public and private sectors. The disaster in the North should not be of concern to the region alone, but the whole country. As the country is thinking of ways to confront the security challenges, attention must be paid to the large army of illiterates and unemployed in the North. Education would reduce the pool from which arsonists and terrorists draw, and motivate the young to dispel rumours and false information.

    In tackling the menace, early marriage and child bearing must be confronted headlong through mass education and campaign. The British Council survey indicated that more than 50 per cent of women in the North get married before they attain the age of 16 and are expected to give birth within the first year of marriage. This is a major reason for the high percentage of illiteracy and ignorance in the region. So, governments at all levels should come up with incentives to encourage the girl child to embrace education. As a first step, all governments, especially in the North, should abolish the payment of levies and fees by girls and young women.

    The National Gender Policy, informed by the Beijing Plan of Action and the Convention on the Elimination of All Forms of Discrimination against Women, formulated in 2006, is yet to be faithfully implemented. The policy should now be given fillip and closely monitored by the media and civil society groups.

  • CBN to maintain value of Naira

    CBN to maintain value of Naira

    The Central Bank of Nigeria  (CBN) continues to intervene in the currency markets to bolster the Naira, after its recent weakening to a seven-month low of 159.10 to the Dollar.

    Although Nigeria is the largest oil-producing nation in Africa, inflation and the need for imports have weakened the currency of late. This fall in value has prompted investors in Nigerian bonds to sell their positions, thereby putting more pressure on the Naira. The CBN’s stated objective, however, is to maintain the value of the nation’s currency within a tight bank of three percent, either side of 155.00. The Naira had strengthened to this plateau over the past year, maintained it for months, but then gradually began to depreciate over the last three months.

    Inflation was the primary concern in 2012. The central bank on six consecutive occasions raised interest rates to address rising prices. Rate changes stopped in November, resting at a 12 percent level. The NCB has passed on any rate adjustments since that time. Lamido Sanusi, Governor of the Nigeria Central Bank, stated this week that he expects the bank to leave interest rates unchanged at 12 percent over the coming months so as not to jeopardize the bank’s efforts to bring inflation back down to single digits, a program designed to stabilize the Naira’s exchange rate.

    Concurrent with this maintaining a constant interest rate posture, the CBN, however, has intervened in the currency markets by holding two U.S. Dollar auctions of $300 million and $276 million over the past week to cover various import needs of the country. When coupled with anticipated month-end sales by local oil producers, the combined effect is to provide stability for the Naira and keep it below the 159.75 threshold. The Naira today is holding steady at 158.55.

    Sewa Wusu, an analyst at Lagos-based Sterling Capital Ltd., has stated in a phone interview with Bloomberg that the “CBN’s increased intervention through the auction has ensured Naira stays within the targeted band amid increased dollar demand.”

    As for near-term prospects, most currency experts are forecasting a stronger Naira, based on the previous open-market actions and expectations of local oil companies. Investors also seem confident that the central bank will continue to support the Naira, as well. One dealer noted that, “We see the Naira trading around the 158 Naira to the Dollar level this week and early next week with more oil companies selling dollars as part of their month-end sales.”

    In a recent Reuters’ survey, 8 of 9 economists predicted that the CBN would not budge from their 12 percent interest rate benchmark. “The main focus of the debate … will be the inflation outlook … and the recent weakness in the currency,” said Andrea Masia, a Morgan Stanley analyst. He was also quick to add that the 2013 budget will have monetary implications that could impact inflation, as well. Inflation currently sits at 9 percent, but Governor Lamido Sanusi has publicly expressed concerns regarding the pressure posed on prices arising from outside of the country.

    Nigerian President Goodluck Jonathan recently approved a 4.99 trillion Naira budget that had received Parliamentary approval in February. The new budget represents a slight rise in government spending of 1.4 percent, a tentative compromise reached after several months of serious debate over future spending plans.

    The stage is now set for further minimal gains over the following week. Kunle Ezun and Kenneth Asenime, local analysts at Ecobank Transnational Inc. in Lagos, suggested a 158.10 figure in a newsletter to their clients, “with bias for moderate appreciation due to monetary policy support.”

    Bio:

    Article by Tom Cleveland of forextraders.com. Mr. Cleveland has been writing about economics and investments since 1980. Since 2010, Mr. Cleveland has been specifically researching currency fluctuations and many aspects of forex news. To read more on his work, view the news section on Forex Traders.

     

     

  • Why CBN Act (2007) should be amended

    Why CBN Act (2007) should be amended

    Majority of reports and analysis of Tuesday, October 23, 2012 on the subject of the Public Hearing on the touchy issue of amendment of the Central Bank of Nigeria Act, 2007 tilted against the proposed amendment. The position of the CBN Governor based on the Reuters report from Tanzania where he was attending a meeting of the African Development Bank (AfDB) shows his vehemence over the impending amendment.

    Bank stakeholders including former governors and directors of CBN have the same view with Sanusi Lamido Sanusi (SLS). The Nigeria Labour Congress was also ad idem with this seemingly popular view of “no-amendment.” I am in opposition to the “no-amendment” campaign although there are certain propositions in the amendment I disagree with.

    I do not support the proposed composition of the CBN Board, which is scheduled to include a Director in the Ministry of National Planning, Director of Federal Inland Revenue Service, among others. The business of the CBN is too serious to be handed over to some of these nominees who are not profound in monetary policies and banking practices.

    Moreover, appointing a former CBN Governor as chairman of the Board may create problems that will polarize the Board. A former CBN Governor may have “analogue” ideas while the sitting CBN Governor may have “digital” ideas. The latter may be hampered by the former who may refuse to acknowledge the rapid changes manifesting in global economic trends.

    The whole essence of the CBN Act of 2007 is to clothe CBN with a garb of autonomy for monetary and price stability in the economy. At that time, the framers of the law thought that each CBN Governor will assume his position, concentrate on his job and paddle through the vicissitudes of economic combinations and permutations.

    It was not conjectured that a certain SLS will appear on the political firmament of Nigeria and use CBN as fulcrum to challenge the powers of the National Assembly on appropriation, donate huge sums of money to Kano and Madallah bomb victims, make political statements at will and enjoy controversy as fish enjoys an aquatic environment.

    It was also not contemplated that the nation will be saddled with a CBN Governor who runs a secretive and speculated annual budget of about N400billion (almost 10per cent of the total annual national budget) for a population of not up to 5,000 persons (who constitute the Board members and staff of CBN).

    One: The power of the National Assembly to appropriate public fund of the Federation is derivable from the Constitution of the Federal Republic of Nigeria, 1999 as amended. Various sections of the Constitution confirm this position. For instance, section 80 (3) of the Constitution provides that:

    No moneys shall be withdrawn from any public fund of the Federation, other than the Consolidated Revenue Fund of the Federation, unless the issue of those moneys has been authorised by an Act of the National Assembly.

    Section 81 (1) and (2) of the Constitution (as amended) makes it mandatory for the president to lay before the NA budget estimates by way of Appropriation Bill before money can be expended from the Consolidated Revenue Fund of the Federation. Section 4 of the Constitution as amended provides:

    (1) The legislative powers of the federal Republic of Nigeria shall be vested in a National Assembly for the Federation which shall consist of a Senate and a House of Representatives.

    (2) The National Assembly shall have power to make laws for the peace, order and good government of the Federation or any part thereof with respect to any matter included in the Exclusive Legislative List set out in Part I of the Second Schedule to this Constitution.

    A closer look at the Exclusive Legislative List, Item 1, Part 1 of the Second Schedule shows that the National Assembly has exclusive power to legislate                   on –

    Accounts of the Government of the Federation, and of offices, courts, and authorities thereof, including audit of those accounts.

    It is indubitable that CBN derives its powers from the CBN Act of 2007. If this be so, it means that the Constitution (as amended) is in a tug-of-war with an Act of the National Assembly. In this contest, section 1 (3) of the Constitution resolves the matter by stating that “If any other law is inconsistent with the provisions of this Constitution, this Constitution shall prevail, and that other law shall to the extent of the inconsistency be void.”

     

     

     

     

     

     

     

     

     

    Therefore, any law that purports to take away from the National Assembly the power to appropriate expenditure arising from public fund is void to the extent of its inconsistency. Where are the checks and balances if the CBN Board that makes the budget is the same one that approves it? This is not how to exercise autonomy.

    Two: The CBN Governor is reported to have argued that the NA has, by the provision contained in section 6 (3) of the CBN Act, “donated” its power of appropriation to the CBN Board. One need not be a Senior Advocate of Nigeria to know that the legislature in a democracy cannot wholly donate a power donated exclusively to it by the Constitution, which is the suprema lex. It is a well-founded legal maxim that delegatus non potest delegare (that is, one cannot delegate a delegated authority) but even where partial delegation has been permitted in cases of this nature, the power of the delegator to retrieve the delegated power cannot be questioned. It is trite that he who has power to give also have power to take back. Can the CBN Board argue that the power to appropriate has been donated to it ad infinitum? This argument of the CBN is, therefore, grossly misplaced and without substance.

    Three: The Act should be amended to promote accountability and transparency. The CBN Act authorises the CBN to audit itself contrary to section 85 of the 1999 Constitution which authorises the Auditor-General of the Federation to carry out such function. Section 85 (2) of the Constitution states that “The public accounts of the Federation shall be audited and reported on by the Auditor-General who shall submit his reports to the National Assembly….”

    I refer readers to subsections (3) and (4) of section 85 of the said Constitution,  which provides as follows:

    (3) Nothing in sub (2) of this section shall be construed as authorising the Auditor-General to audit the accounts of or appoint auditors for government statutory corporations, commissions, authorities, agencies, including all persons and bodies established by an Act of the National Assembly, but the Auditor-General shall –

    (a) provide such bodies with –

    (i)   a list of auditors qualified to be appointed by them as external auditors and from which the bodies shall appoint their external auditors, and

    (ii) guidelines on the level of fees to be paid to external auditors; and

    (b) comment on their annual accounts and auditor’s report thereon.

    (4) The Auditor-General shall have power to conduct periodic checks of all government statutory corporations, commissions, authorities, agencies, including all persons and bodies established by an Act of the National Assembly.

    Notwithstanding the clear provisions of the Constitution on matters of audit, section 6 (3) (b) and (d) of the CBN Act provides that the CBN Board shall be responsible for:

    (b) the approval of the audited and management accounts and the  consideration of the management letter from the external auditors;

    (d) making recommendation to the President for the appointment of auditors in accordance with section 49 of this Act, the provision of the necessary facilities and the rates of remuneration.

    A juxtaposition of the constitutional stipulation on audit and that of the role of CBN on audit clearly shows that of CBN as unconstitutional in view of the conflict. In fact, under the CBN Act, the same Board that expends the public fund is responsible for the approval of the audited and management accounts and the consideration of management letter from the external auditors, and making recommendation to the president for the appointment of auditors. Certainly, the Auditor-General has not been given any role to play in the CBN Act thereby destroying the system of checks and balances required in a democracy.

    Four: The NA has argued that the Fiscal Responsibility Act of July 2007 is later in time and as such takes precedence over and above the CBN Act of May 2007 placing reliance on the legal maxim of lex posterior derogat priori. The CBN, on its part, seem to rely on the interpretation of generalia specialibus non derogant, which means that a general thing does not derogate from a special thing.

    In this context, the Fiscal Responsibility Act is the general thing while the CBN Act is the special thing. This implies that a general law like the Fiscal Responsibility Act cannot derogate from a specific law like the CBN Act. I tend to agree that the Fiscal Responsibility Act overshadows the CBN Act hence the CBN Act contains subordinate provisions to those of the Fiscal Responsibility Act and this is the intendment of the draftsman.

    Five: Not amending the CBN Act will amount to flagrant and express breach of section 21 of the Fiscal Responsibility Act, 2007. That section provides: Preparation of estimates of revenue and expenditures by corporations, etc.

    1.   The Government corporations and agencies and government owned companies listed in the schedule to this Act (in this Act referred of as “the corporations”) shall, not later than 6 months from the commencement of this Act and every three financial years thereafter and not later than the end of the second quarter of every year, cause to be prepared and submitted to the Minister their Schedule estimates of revenue and expenditure for the next three financial years.

    2.   Each of the bodies referred to in subsection(1) of this section shall submit to the Minister not later than the end of August in each financial year:

    a.   An annual budget derived from the estimates submitted in pursuance of subsection(1) of this section; and

    b.   Projected operating surplus which shall be prepared in line with acceptable accounting practices.

    3.   The Minister shall cause the estimates submitted in pursuance of subsection (2) of this section to be attached as part of the Appropriation Bill to be submitted to the National Assembly.”

    The schedule referred to in this section and attached to the Fiscal Responsibility Act listed 31 government corporations, agencies and companies affected by this section. In fact, CBN is the 31st and last corporation named in the said list. Other corporations named such as NNPC, NPA, NDIC, etc. have complied with the law while only CBN has successfully resisted compliance relying on the CBN Act. The CBN Act is not sacrosanct as power without control is vanity. Liberty (some call it “autonomy”) of the CBN must conform to the law. It was Charles Montesquieu, French historian (1689-1755), who said that “Liberty is the right to do everything which law allows.” What CBN wants is, in fact, absolute liberty. It is trite that the fact that the law has granted a person freedom of expression has not guaranteed him the right to shout “fire” in an amphitheatre where no fire is burning. Lord Acton (1834 to 1902) has said it that power tends to corrupt and absolute power corrupts absolutely. Leaving CBN Governor with absolute power, as it currently obtains in the CBN Act, is illogical and harmful to the society itself.

    Six: CBN is the only government corporation that fixes the salaries of its board and staff; makes and approves its budget; accounts to and audits itself. For instance, section 8 (3) of the CBN Act provides that salaries, fees, wages or other remuneration or allowances including pension and other allowances payable to the Governor and the deputy governors shall be as stipulated from time to time by the Board subject to the approval of the President.

    In practice, the President is too busy to scrutinize any sum fixed as salaries and wages by the Board. As it is today, the annual take-home pay of the Nigerian President is known but that of the CBN Governor is not known. The National Assembly wants to amend this provision so that the Revenue Mobilisation, Allocation and Fiscal Commission would bear the responsibility of fixing these salaries and wages.

    Can it be said that CBN does not have confidence in any other government institution except itself? How does this amount to loss of autonomy? In contrast to the CBN Act, section 9 of the Fiscal Responsibility Act, which created the Fiscal Responsibility Commission to regulate government corporations including the CBN, provides that emoluments, salaries, allowances and benefits payable to the Chairman and members of the Commission shall be such as the Revenue Mobilisation, Allocation and Fiscal Commission may from time to time approve. The envisaged amendment will only bring the CBN at par with international practices and cannot negatively affect its autonomy/independence as it is being bandied by some people.

    Seven: To reduce impunity on the part of the CBN, its Act should be amended. The Board of CBN is comprised of 12 members. Section 6 (2) of the CBN Act provides as follows: The Board shall consist of –

    (a) a Governor who shall be the Chairman;

    (b) four Deputy Governors;

    (c)  the Permanent Secretary, Federal Ministry of Finance;

    (d) five Directors; and

    (e) Accountant-General of the Federation.

    From this list, the four deputy governors and five directors are answerable to the CBN Governor, who is their boss. They kowtow and grovel to him on any issue, more so where under section 7 (1) of the CBN Act the CBN Governor determines who, among the deputy governors, acts for him in his absence. The tendency is that none of these subordinates will toe a different line on any position adopted by the Governor.

    The Permanent Secretary, Federal Ministry of Finance and the Accountant-General of the Federation, who are also members of the Board, are of no consequence even if they are opposed to a subject under consideration. From this scenario, the CBN Governor is the alter ego of the CBN Board. He is the Alpha and Omega of CBN. Tinkering with the composition of this Board in a fair manner will democratise the activities of the Board and save it from continuing as one-man show.

    The level of impunity being perpetrated by the CBN can never be allowed by any democracy marked by rule of law and adherence to order and good governance. What CBN calls “autonomy” is euphemism for “impunity.” In Sanusi’s comparative fallacy, he claims that 40 countries in his list of analogy covet autonomy. Well taken! What he did not tell Nigerians is whether the central bank of these 40 countries operate without any input from their parliaments.

    We are not told that these 40 countries have provisions in their laws which make their boards wholly subservient to their heads. The voices of Alhaji Ciroma, Joseph Sanusi, Green Nwankwo, NLC and others supporting the status quo will dim if and when they decide to look at this amendment in relation to the Constitution and the Fiscal Responsibility Act. It is only then they will understand that a part should not be greater than a whole and a subset should not be larger than the parent set. Since the CBN Act is an Act of the National Assembly, the same National Assembly that represents the voice of the electorate, has deemed it necessary to effect a change. Let us not resist this change. According to Blair J. Kolasa, in Behavioural Science, cited in Vanguard Book of Quotations, Compiled by Dr. Bamidele A. Sobowale, p. 26,

    We may not recognise it or otherwise be cognizant of it, we may oppose it, or even try to accelerate it. No matter what our position may be, change makes its course in the evolution of human effort. Change may take place so slowly that it is no perception in one rapidity that we are left somewhat breathless in the wake of the waves.

    If this change occurs, Sanusi may remember the words of Richard Cheney, American Secretary of Defence, in 1992 (cited in Vanguard Book of Quotations) to wit, “It is easy to take liberty for granted when you have never had it taken from you.”

     

    • Eze is a Lagos-based attorney and the Principal Counsel of the law firm of Eze & Associates.